THE INDUSTRIAL TRIBUNALS

CASE REF:	901/13

CLAIMANT:			Gerard McCloskey

RESPONDENT:		Frank J O’Donnell

DECISION 
(A)	The claimant’s wages claim is well-founded and it is ordered that the respondent shall pay to the claimant the sum of £2,250 in respect of wages.
(B)	The claimant’s holiday pay claim is well-founded and it is ordered that the respondent shall pay to the claimant the sum of £1,350 in respect of holiday pay.
(C)	The claimant’s claim for notice pay is well-founded and it is ordered that the respondent shall pay to the claimant the sum of £1,800 in respect of notice pay.  
(D)	The claimant’s redundancy pay claim against the respondent is well-founded and it is declared that the respondent is liable to make a redundancy payment of £6,665 to the claimant.

Constitution of Tribunal:
Chairman (sitting alone):		Mr P Buggy

Appearances:
The claimant was self-represented.

The respondent was not represented in his capacity as a party to the proceedings.

REASONS

1.	In these proceedings, the claimant makes claims in respect of wages, holiday pay, notice pay and redundancy pay.

The wages, holiday pay and notice pay claims

2.	Mr O’Donnell has stated in writing that he does not resist any of these claims.  That is why I have upheld the claimant’s claims in respect of wages, holiday pay and notice pay.  That is also why I have awarded the sums specified above in respect of wages, holiday pay and notice pay.

The redundancy pay claim

3.	The claimant provided sworn oral testimony in these proceedings.  So did Mr O’Donnell.  

4.	In light of that testimony, I have no doubt that the claimant was employed by Mr O’Donnell for a continuous period, from 23 February 2000 at least until 20 October 2011.

5.	According to the claimant’s claim form, (at paragraph 5(2) of that claim form), the claimant was employed by Mr O’Donnell from 23 February 2000 until 20 October 2011.  According to the same claim form, (at paragraph 6.7), he was self-employed on and off from 5 December 2011 until 6 April 2012.  According to paragraph 6.10 of the claim form, he has been on Employment Support Allowance from 12 August 2012.

6.	The details of his claim, as set out at paragraph 7.4 of the form, were as follows:

“My money was cut by nearly half in June/July 2011 and then a van was taken off me.  I had to make my own way into work and cover fuel costs even though my job came with a van and fuel.  Mr Frank O’Donnell said he would give me redundancy if I stayed with him for one more job which I agreed and we shook hands on it.  I stayed but he stopped paying me around 15 September 2011.  I was going to work every day hoping this will be the day he would sort everything out or I’ll get my pay this week but it never happened.  I wanted the money I was owed and didn’t know what else to do so [I] kept going to work because I thought if I left I would get nothing because he would say I left my job.  No one could get in touch with him.  No one knew anything.  I was owed five weeks’ pay  and could not afford to travel to work anymore without getting pay, so stopped going into work around the end of October (20th) 2011)”.

7.	That claim form was presented on 11 May 2013.  Accordingly, the date of presentation of the claim form was more than a year after October 2011, and less than a year after June 2012.  Those matters are of considerable significance: see below.  

8.	Article 199 of the Employment Rights (Northern Ireland) Order 1996 (“the Order”) provides for time-limits in respect of claims against an employer for redundancy pay.  Article 199 is in the following terms:

“(1) 	An employee does not have any right to a redundancy payment unless, before the end of the period of six months beginning with the relevant date - 

(a)	the payment has been agreed and paid,

(b)	the employee has made a claim for the payment by notice in writing given to the employer,

(c)	a question as to the employee's right to, or the amount of, the payment has been referred to an industrial tribunal, or

(d)	a complaint relating to his dismissal has been presented by the employee under Article 145.

(2) 	An employee is not deprived of his right to a redundancy payment by paragraph (1) if, during the period of six months immediately following the period mentioned in that paragraph, the employee -

(a)	makes a claim for the payment by notice in writing given to the employer,

(b)	refers to an industrial tribunal a question as to his right to, or the amount of, the payment, or

(c)	presents a complaint relating to his dismissal under Article 145,
and it appears to the tribunal to be just and equitable that the employee should receive a redundancy payment.

(3) 	In determining under paragraph (2) whether it is just and equitable that an employee should receive a redundancy payment an industrial tribunal shall have regard to -

(a)	the reason shown by the employee for his failure to take any such step as is referred to in paragraph (2) within the period mentioned in paragraph (1), and

(b)	all the other relevant circumstances.”

9.	It is clear law that if a claim is outside the relevant time-limits specified in Article 199, the right to a redundancy payment (not just the remedy in respect of redundancy payment entitlements) is extinguished.  So, the RPS cannot make a payment to an applicant in respect of a redundancy payment if the redundancy payment is no longer due from the employer.

10.	The claim has never been agreed and paid.  At all material times, the claimant in this case has accepted that he never made a written claim to Mr O’Donnell in respect of the payment of a redundancy payment.  The claimant never made a claim for unfair dismissal.  A question as to the claimant’s right to, of the amount of, the redundancy payment was not referred to an industrial tribunal until May 2013.
11.	Accordingly, if the claimant’s employment with Mr O’Donnell came to an end in October 2011, his entitlement to a redundancy payment has, unfortunately, been extinguished.  On the other hand, if the claimant’s employment with Mr O’Donnell really did terminate in June 2012, his entitlement to a redundancy payment will be preserved if “it appears” to me to be “just and equitable” that the claimant should receive a redundancy payment.  That is why the precise date of the termination of this claimant’s contract of entitlement with the respondent is of crucial significance in this case.

12.	According to the claimant, he refrained from issuing industrial tribunal proceedings earlier because he was ignorant as to his legal entitlements and because he hoped that Mr O’Donnell would be able and willing to make a payment to him in respect of redundancy in due course.  I do not consider that to be a particularly persuasive explanation for the failure to bring proceedings at an earlier date.  However, I see no reason why the lack of a good excuse for delay should lead to a claimant being deprived of any entitlement for a redundancy payment which he would have had if he had brought these proceedings within six months of the date of the termination of his employment.  I think it would be just and equitable in such circumstances for the claimant to receive a payment.

13.	Accordingly, the key question, in relation to the these industrial tribunal proceedings, is whether the claimant’s contract of employment came to end in October 2011 (as stated by him in the claim form) or whether it came to an end in June/July 2012 (as now asserted by him).

14.	During a Case Management Discussion (“CMD”) which took place in July 2013, the time-limit issues were brought to the claimant’s attention, apparently for the first time.

15.	On 5 August 2013, the claimant wrote to the Office of the Industrial Tribunals in the following terms:

“I am writing this letter to explain why I don’t want my claim to be struck out.  I still want to pursue this claim and I think I am indeed entitled to a redundancy payment.

I stated in my claim that in October 2011 I couldn’t travel to work any more because Mr O’Donnell had taken the work van off me.  He did not pay me for previous work done or holiday pay.  I did not at any time resign from Protech Engineering [which is the trade name under Mr O’Donnell operated the relevant business] nor did I receive a P45 or P60.  I still continue to do several jobs for Mr O’Donnell sometimes getting paid sometimes not.  When I did get paid I always got paid cash after October 2011.  The last job I did for him was in July 2012 at Westland Peat in Dungannon and I am sure you can confirm this with the foreman.  As I believe you were in contact with Mr O’Donnell he will also be able to confirm this …”

16.	Along with the 5 August letter, the claimant enclosed the original of a letter which had allegedly been written by Mr O’Donnell in June 2012.  The letter was in the following terms:

“I write to confirm the situation communicated to you at our meeting on 22 June 2012.
The meeting began with an explanation of the current work situation, namely lack of work.

Our view is that this is a temporary situation and as consequence of the situation and with much regret, we have decided to invoke a temporary lay-off.

Lay-off means that for the first 5 days in which no work is available in a 13 week period you will be entitled to be paid for any day when you do not work at the rate of £23.50 per day, which is the statutory value of guaranteed pay.

The lay-off takes effect from 25 June 2012 and the following details the currently expected workless days.

From 25 June 2012 for four weeks.  

I will notify you with as much notice as possible if the situation changes.

I regret that we have had to take this step and assure you of our best endeavours to bring the lay-off situation to an end as quickly as possible”.

The course of the proceedings

17.	When this case came on for hearing on 10 September 2013, I received sworn oral testimony from the claimant only.  At that point, I invited him to call Mr O’Donnell as a witness.  I told him that I was willing to issue a witness summons for that purpose.  He acceded to my invitation.  He requested me to issue a witness summons.  I did so.  The case was reconvened and the second and final date of hearing was on 27 September 2013.  During that reconvened hearing, Mr O’Donnell gave evidence.  

18.	In his sworn oral testimony, Mr O’Donnell confirmed the gist of the account of events which had been set out in the claimant’s letter of 5 August 2013.

Conclusions on the redundancy pay claim

19.	I have some doubts about the accuracy of that (now agreed) second version of events.  There was no hint of that second version of events in the claim form as originally drafted.  The new version of events was put forward only after the claimant had been told, during the course of the July CMD, that his claim was likely to be doomed in view of the alleged termination date of October 2011.  I regarded aspects of the sworn testimony of both of the claimant and Mr O’Donnell as being surprisingly vague.  I regarded aspects of the evidence of each of them as being, in some respects, apparently evasive and unconvincing.  There is no documentary support for the second version of events, apart from the lay-off letter which purports to have being given to the claimant on or about 26 June 2012, which was enclosed with the claimant’s 5 August letter.  I did not find the claimant’s explanation for the differences between the two versions of events (the version of events set out in the claim form as originally drafted, and the version of events in his August 2013 letter) to be particularly persuasive.

20.	That explanation was as follows.  Whenever he worked for Mr O’Donnell after October 2011, he was getting paid in cash.  That is why he did not mention that post-October 2011 work, in his claim form as originally drafted.
21.	According to the claimant, and according to Mr O’Donnell, the contract of employment was regarded by both of them as continuing, throughout the period from October 2011 until June 2012, even though the claimant (because of lack of work available from Mr O’Donnell) from time to time worked elsewhere, or for other people, during that period.

22.	This second version of events is an agreed version of events.  The two parties to the present proceedings, who are the only parties to the present proceedings, have agreed that that version of events is the correct version of events.  In essence, Mr O’Donnell has admitted that the claimant’s new version of events is correct.  I consider that, for the purposes of the present proceedings, which involve only a claim by the employee against the employer, I am obliged to regard the new version of events as the correct version of events.

23.	In its judgment in Delaney v McMahon, which was issued by the Northern Ireland Court of Appeal earlier this month, the Court has helpfully provided guidance as to the circumstances in which a contract of employment is to be regarded as unenforceable, in situations in which the relevant employee’s tax has not been subjected to income tax deductions.  Having carefully considered the guidance set out in that judgment, I am satisfied that the claimant’s alleged post-October 2011 contract of employment cannot properly be regarded as being vitiated by illegality.  I have so concluded because, although the claimant may well have acquiesced in any non-payment of income tax deductions, I have no evidence that he was an active “participant” in that context (in the sense in which the concept of participation is used in this area of law: See Enfield Technical Services v Payne [2008] ICR 30).  Accordingly, I am not obliged to dismiss this application in respect of a redundancy payment on account of any illegality of performance, of the contract of employment, during any post-October 2011 period. 

24.	The amount of redundancy payment has been calculated on the basis of the agreed duration of the claimant’s length of service and takes account of his age and of the amount of his weekly gross wages.

Any practical effect?

25.	This Decision may possibly have no practical effect.

26.	The respondent, Mr O’Donnell, has made it clear to me that he will be unable to make any payments pursuant to any tribunal award which might be made.

27.	If and when Mr O’Donnell becomes bankrupt, Redundancy Payments Service (“the RPS”) will no doubt make its own independent investigations and decide what sums, if any, are due to this claimant in respect of wages, holiday pay and notice pay.  (If the claimant is then unhappy about the RPS decision, he will then have a fresh right of appeal to an industrial tribunal).  

28.	At present, In the meantime, the RPS only has power to make payments in respect of redundancy pay.  In the context of the claimant’s application to the RPS in respect of redundancy pay, my formal determination (as set out above) that redundancy pay of £6,665 is due to the claimant from the respondent, is an important development in his favour, but it is not enough.

29.	Why is it not enough?  Because the RPS has not participated in the present proceedings and accordingly is not bound by the outcome of these employer versus employee proceedings.  (See Secretary of State for Employment v Globe Elastic Thread Co Ltd [1979] IRLR 327 and the concluding remarks in the EAT judgment in Jones v Secretary of State for Employment [1982] 1 ICR 389).  

30.	Accordingly, this Decision is, in practice, a necessary (although insufficient) condition for success in any redundancy pay application which the claimant may pursue with the RPS.  That is because of the effect of Article 201(1)(a) of the Order.  That sub-paragraph of paragraph (1) of Article 201 is to the following effect.  It provides that, if the employer is not formally insolvent, the employee can receive a payment from the RPS, in respect of a redundancy payment, only if that employee has “taken all reasonable steps” to recover the payment from the employer.  (In practice, “all reasonable steps” is usually construed by the RPS as including the pursuit of industrial tribunal proceedings against the employer).

31.	The RPS will no doubt investigate any application which this claimant may make to the RPS in respect of redundancy pay.  No doubt, in carrying out its process of assessment in relation to any such application, the RPS will have regard to the claimant’s HMRC contributions record, and to his social security benefits record.  

Interest 

32.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing:  10 September and 27 September 2013, Belfast.		

Date decision recorded in register and issued to parties: